Question

Instructions (a) Identify each of the above costs as direct materials, direct labor, manufactu head, or period costs. (b) Explain the basic difference in accounting for product costs and period costs. ect labor, manufacturing over- $69,100 46,400 E14.4 Knight Company reports the following costs and expenses in May. Factory utilities $ 15,500 Direct labor Depreciation on factory Sales salaries equipment 12,650 Property taxes on factory Depreciation on delivery trucks 3,800 building Indirect factory labor 48,900 Repairs to office equipment Indirect materials 80,800 Factory repairs Direct materials used 137,600 Advertising Factory manager's salary 8,000 Office supplies used Instructions From the information, determine the total amount of: (a) Manufacturing overhead. b) Product costs. c) Period costs. 2,500 1,300 2,000 15,000 2,640 14. Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows. 1. Property taxes on the factory building. 2. Production superintendents' salaries. 3. Memory boards and chips used in assembling computers. 4. Depreciation on the factory equipment. 5. Salaries for assembly-line quality control inspectors. 6. Sales commissions paid to sell laptop computers. 7. Electrical components used in assembling computers. 8. Wages of workers assembling laptop computers. 9. Soldering materials used on factory assembly lines. 10. Salaries for the night security guards for the factory building The company intends to classify these costs and expenses into the following categories (a) direct materials, (b) direct labor, (c) manufacturing overhead, and (d) period costs. Instructions List the items (1) through (10). For each item, indicate the cost category to which it belong E14-6 The administrators of Crawford County's Memorial Hospital are interested in iden tifying the various costs and expenses that are incurred in producing a patient's X-ray. list of such costs and expenses is presented below. 1. Salaries for the X-ray machine technicians. 2. Wages for the hospital janitorial personnel. 3. Film costs for the X-ray machines. 4. Property taxes on the hospital building. 5 Salary of the X-ray technicians' supervisor.

Answer 1

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Knight Company
Answer a
Manufacturing Overhead	Amount $
Factory utilities	15,500.00
Depreciation factory equipment	12,650.00
Indirect factory Labor	48,900.00
Indirect Material	80,800.00
Factory managers salary	8,000.00
Property tax on factory building	2,500.00
Factory repairs	2,000.00
Total Manufacturing Overhead	170,350.00
Answer b
Product costs	Amount $
Direct materials used	137,600.00
Direct Labor	69,100.00
Total Manufacturing Overhead	170,350.00
Product costs	377,050.00
Answer c
Period costs	Amount $
Depreciation Delivery Trucks	3,800.00
Sales salaries	46,400.00
Repairs to office equipment	1,300.00
Advertising	15,000.00
Office supplies used	2,640.00
Period costs	69,140.00